KINGSTOWN, St. Vincent, CMC – The St. Vincent and the Grenadines government says it has collected EC$70 million (One EC dollar=US$0.37 cents) in tax revenue during the first eight months of the year, compared to the same period of 2024.
However, it acknowledged that spending outstripped receipts slightly, resulting in a current account deficit of EC$718,000, down from EC$19.3 million the previous year.
Finance Minister Camillo Gonsalves told Parliament that the current revenue of the Ralph Gonsalves government’s fiscal performance during the first eight months of the year amounted to EC$583 million, compared to EC$517 million for the same period last year.
“So we’re almost EC$70 million up 60-odd million, and at 2023 at this period, we were at EC$481 million. So current revenue is up over EC$100 million over 2023,” he said, adding that total revenue and grants were EC$624 million compared to EC$559 million year to date in 2024, and EC$514 million in 2023.
“Oh, that’s up $110 million over the two years,” he said.
The EC$70 million in taxes collected through August 31 represents an 11 percent increase over the EC$62 million collected in the same period last year. Corporate taxes stood at EC$40 million, a 22 percent increase over the 2024 period, when they were EC$33 million.
“That always suggests that businesses are doing a little more business, making a little more money, and that’s good, that’s good for everybody,” Gonsalves said, adding that taxes on goods and services generated EC$182 million as opposed to EC$175 million in 2024 and EC$167 million in 2023.
Taxes on international trade were at EC$159 million, compared to EC$132 million in 2024 and EC$115 million in 2023. The sale of goods and services generated EC$75.4 million, compared to EC$61 million in 2023 and EC$51 million in the previous year.
Capital revenue and grants were flat year-on-year at EC$41 million this year, compared to EC$32 million in 2023.
Gonsalves said total expenditure was EC$841 million on August 31, as compared to EC$728 728, year-on-year, and EC$601 million in 2023, adding “You will notice that although the current revenue is increasing dramatically, so, too, is the expenditure.”
The finance minister stated that current expenditure stood at EC$584 million at the end of August, compared to EC$536 million in 2024 and EC$484 million in 2023.
“You’re seeing the trend that if you go back two years, everything is up in the neighbourhood of $100 million, going back from the 2023 period to now.” Gonsalves said one of the “ig-ticket items” is the compensation of employees, which was EC$262 million, up from EC$244 million in 2024 and EC$232 million in 2023.
He said that the salary increase that took effect this year contributed to the higher spending.
On the capital side, capital expenditure was EC$257 million.
He noted that in 2024, the Government set a record capital spending of EC$568 million, even though the actual amount as of August 31, 2024, was EC$191 million.
“Oh, we are far outstripping last year’s record pace,” Gonsalves said, adding that capital spending was up 34 per cent.
The current balance shows a $700,000 deficit, compared to last year’s $19 million deficit. And the primary balance is a deficit of 130 as opposed to a deficit of 97 last year,” he said.
The finance minister stated that the current expenditure of EC$584 million was almost equal to the current revenue, resulting in a deficit of less than EC$1 million. As of August 31, the Government had recorded revenue totaling 1.05 billion, including both current revenue and capital receipts.
“his represents 57 per cent of the amount budgeted to be collected for the year on the expenditure side,” Gonsalves said, noting that current expenditure, amortisation, sinking fund contributions, and capital expenditure added up to approximately one billion EC dollars or 54 per cent of the budget.
“he total budget would be broken down as follows: current revenue, of EC$583 million; capital receipts of EC$471 million, of which grants are 36 million, external loans are 292 million, local loans of 107 million, disposal of land of 1 million, and other receipts of 35 million …”
He stated that the expenditure was EC$584 million, comprising financing of EC$158 million, amortization of EC$146 million, sinking fund contributions of EC$11 million, and capital expenditure of EC$257 million.
Gonsalves stated that, with two-thirds of the year having passed, current revenue has performed well, increasing by 12.8 percent and accounting for just over 64 percent of the budget so far.
“We’ve had good performance from taxes on income and profits, which increased by 13 per cent because all subcomponents performed better than last year, especially corporate taxes, which outperformed their respective year-to-date budget targets.”
Similarly, taxes on international trade increased by 21 percent, and the sub-components of import duty, vehicle surtax, and VAT also outperformed their previous year’s and year-to-date budgets.
Revenue from sales of goods and services increased by 24.5 percent, driven by higher collections on driver’s licenses, which also outperformed their target to date. Recurrent expenditure saw an 8.9 percent increase in spending, accounting for approximately 64% of the budget to date.
“his is driven by increased expenditure on the compensation of employees, which went up by 7.1 per cent due to the 2.5 per cent salary increase for public servants, along with increases in increments and allowances, and also some new hirings.”
Gonsalves said the one per cent increase in the National Insurance Services contribution rate also contributed to part of this 7.1 per cent increase in compensation.
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